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US economy to ride tax cut tailwind but faces risks

A woman carries shopping bags in Manhattan in New York City, Aug. 11, 2025. — REUTERS/EDUARDO MUNOZ

A see-saw year for the US economy in 2025 looks set to give way to a stronger 2026 thanks to tailwinds from President Donald Trump’s tax cuts, less uncertainty around tariffs, the ongoing artificial intelligence boom and a late-year run of interest-rate reductions from the Federal Reserve.

Among the biggest drivers of a pickup in growth, economists say, are fatter tax refunds and smaller tax withholdings on paychecksUS that are expected to provide a lift to consumer spending, the backbone of the American economy.

Trump’s One Big Beautiful Bill also gives companies a range of credits and tax breaks, including the ability to fully write off expenses from investments, that may fuel capital spending beyond data centers and other AI-related areas.

“The boost from fiscal stimulus alone could add one-half percent or more to first quarter GDP growth,” wrote KPMG chief economist Diane Swonk.

At the same time, the impact of Trump’s tariffs on prices is projected to peak in the first half of the year. If price pressures then recede, as Fed policymakers increasingly believe they will, wages will have more room to outpace inflation, bolstering household finances further.

Meanwhile business spending on the infrastructure that powers AI, a key component of economic growth in 2025, looks poised to continue as mega technology firms such as Amazon and Google parent Alphabet promise more investments ahead.

The upshot: a better outlook for businesses stuck for much of this past year in a “low-hire, low-fire” mode as they sought to weather Trump’s disruptive trade policies and aggressive immigration crackdown.

“We expect fading policy uncertainty, the boost from tax cuts and the recent loosening of monetary policy to mean the economy strengthens in 2026,” said Oxford Economics analyst Michael Pierce.

‘HEADWINDS ARE ABATING’
A stronger economy was a core promise of Trump’s presidential election campaign, but as he began his second term in the White House early this year the economy shrank amid the rollout of his unexpectedly aggressive tariffs. The average US import levy shot to nearly 17% in Trump’s first year from less than 3% at the end of 2024, according to Yale Budget Lab.

Growth rebounded in the second quarter as the contours of his trade policies became clearer and businesses and households began to adjust. It accelerated further in the third quarter to a 4.3% annualized pace as Americans, particularly those with higher incomes who benefited from the runup in the stock market, increased spending and companies poured money into AI.

Economists expect fourth-quarter growth to slow substantially, reflecting the impact of the six-week federal government shutdown that began October 1, but with the reopening that drag will reverse in the new year.

“Growth in 2025 has been resilient despite a substantial drag from trade and immigration policy,” Nomura economists wrote. “Now these headwinds are abating at the same time fiscal and monetary policy are becoming stimulative.”

There are many risks: A weakening labor market, still-elevated inflation, and a central bank deeply divided over which of those dueling problems to focus on.

Meanwhile Trump is poised to pick a new Fed chair to take over when Jerome Powell’s term ends in May. Whoever he picks is universally expected to push for lower interest rates.

This year the US job market steadily slowed, with monthly job gains down sharply from what they were a year ago and the unemployment rate ticking up, key reasons that Fed policymakers did coalesce around a string of interest-rate cuts in the final months of the year. The unemployment rate was 4.6% in November, though economists said the reading was distorted by the lack of data collection during the government shutdown.

Stubbornly elevated inflation may limit further rate cuts next year.

While third-quarter inflation was much more muted than expected, economists say it was not a clear indicator and likely understated real price pressures. Meanwhile it will take months to bear out whether tariff-driven goods inflation will indeed fade as many policymakers now expect.

Household concerns over the weaker job market – evident in the latest data from the Conference Board showing a deterioration in consumers’ perceptions of the labor market to levels last seen in early 2021 – have some economists predicting families will save rather than spend the extra money from the Trump tax cuts.

And while businesses may gain from investment in AI if it helps them do more with fewer people, employees and job-seekers may not benefit in the same way.

“We expect the unemployment rate to stabilize at 4.5% as hiring picks up on the back of stronger final demand growth,” wrote Goldman Sachs’ economist David Mericle. “Further labor market softening is the largest downside risk to our forecast because hiring is starting from a weak place and the promise of AI might restrain it further.” — Reuters

Bondi gunmen acted alone, no evidence they were part of militant cell, Australian police say

People gather at the floral tribute at Bondi Beach to honor the victims of a mass shooting targeting a Hanukkah celebration on Sunday at Bondi Beach in Sydney, Australia. — REUTERS

SYDNEY — Two gunmen who allegedly opened fire on a Jewish celebration on Sydney’s Bondi Beach earlier this month acted alone and there was “no evidence” they were part of a militant cell, police said on Tuesday.

Naveed Akram and his father Sajid Akram are alleged to have killed 15 people at a Hanukkah event on December 14, Australia’s worst mass shooting in almost three decades that shocked the nation and led to immediate reforms of already strict gun laws.

Police have previously said the men were inspired by Islamic State, with home made flags of the militant group found in their car after the attack, and a month-long trip by the pair to a Philippines island previously plagued by militancy a major focus of investigation.

But on Tuesday, Australian Federal Police Commissioner Krissy Barrett said there was no indication the men had received formal training on the November trip to Mindanao in the Philippines.

“There is no evidence to suggest these alleged offenders were part of a broader terrorist cell, or were directed by others to carry out an attack,” Ms. Barrett told a news conference.

She added the findings were an initial assessment, and authorities in Australia and the Philippines were continuing their investigation.

“I am not suggesting that they were there for tourism,” she said, referring to the Philippines trip.

Sajid Akram was shot dead by police during the attack, while his son Naveed, who was also shot by police, was charged with 59 offenses after waking from a days-long coma earlier this month. Naveed Akram faces charges ranging from 15 counts of murder to terror and explosives offenses. — Reuters

Admit it, you’re in a relationship with AI

A screen reads ‘AI’ in reference to artificial intelligence in this file photo. — REUTERS/CARLOS BARRIA/FILE PHOTO

By Parmy Olson

Amelia Miller has an unusual business card. When I saw the title of “Human-AI Relationship Coach” at a recent technology event, I presumed she was capitalizing on the rise of chatbot romances to make those strange bonds stronger. It turned out the opposite was true. Artificial intelligence tools were subtly manipulating people and displacing their need to ask others for advice. That was having a detrimental impact on real relationships with humans.

Miller’s work started in early 2025 when she was interviewing people for a project with the Oxford Internet Institute, and speaking to a woman who’d been in a relationship with ChatGPT for more than 18 months. The woman shared her screen on Zoom to show ChatGPT, which she’d given a male name, and in what felt like a surreal moment Miller asked both parties if they ever fought. They did, sort of. Chatbots were notoriously sycophantic and supportive, but the female interviewee sometimes got frustrated with her digital partner’s memory constraints and generic statements. 

Why didn’t she just stop using ChatGPT?

The woman answered that she had come too far and couldn’t “delete him.” 

“It’s too late,” she said.

That sense of helplessness was striking. As Miller spoke to more people it became clear that many weren’t aware of the tactics AI systems used to create a false sense of intimacy, from frequent flattery to anthropomorphic cues that made them sound alive.

This was different from smartphones or TV screens. Chatbots, now being used by more than a billion people around the globe, are imbued with character and humanlike prose. They excel at mimicking empathy and, like social media platforms, are designed to keep us coming back for more with features like memory and personalization. While the rest of the world offers friction, AI-based personas are easy, representing the next phase of “parasocial relationships,” where people form attachments to social media influencers and podcast hosts.

Like it or not, anyone who uses a chatbot for work or their personal life has entered a relationship of sorts with AI, for which they ought to take better control.

Miller’s concerns echo some of the warnings from academics and lawyers looking at human-AI attachment, but with the addition of concrete advice. First, define what you want to use AI for. Miller calls this process the writing of your “Personal AI Constitution,” which sounds like consultancy jargon but contains a tangible step: changing how ChatGPT talks to you. She recommends entering the settings of a chatbot and altering the system prompt to reshape future interactions.

For all our fears of AI, the most popular new tools are more customizable than social media ever was. You can’t tell TikTok to show you fewer videos of political rallies or obnoxious pranks, but you can go into the “Custom Instructions” feature of ChatGPT to tell it exactly how you want it to respond. Succinct, professional language that cuts out the bootlicking is a good start. Make your intentions for AI clearer and you’re less likely to be lured into feedback loops of validation that lead you to think your mediocre ideas are fantastic, or worse.

The second part doesn’t involve AI at all but rather making a greater effort to connect with real-life humans, building your “social muscles” as if going to a gym. One of Miller’s clients had a long commute, which he would spend talking to ChatGPT on voice mode. When she suggested making a list of people in his life that he could call instead, he didn’t think anyone would want to hear from him.

“If they called you, how would you feel?” she asked.

“I would feel good,” he admitted.

Even the innocuous reasons people turn to chatbots can weaken those muscles, in particular asking AI for advice, one of the top use cases for ChatGPT. The act of seeking advice isn’t just an information exchange but a relationship builder too, requiring vulnerability on the part of the initiator.

Doing that with technology means that over time, people resist the basic social exchanges that are needed to make deeper connections. “You can’t just pop into a sensitive conversation with a partner or family member if you don’t practice being vulnerable [with them] in more low-stakes ways,” Miller says.

As chatbots become a helpful confidante for millions, people should take advantage of their ability to take greater control. Configure ChatGPT to be direct, and seek advice from real people rather than an AI model that will validate ideas. The future looks far more bland otherwise. — Bloomberg

Grab, HOPE break ground on new classroom in Bicol

Grab Philippines and HOPE have officially broken ground on the first classroom to be built at Inang Maharang Elementary School. Shown here are Grab Philippines Country Head Ronald Roda (left), and HOPE Founder and Executive Chairperson Nanette Medved-Po.

Grab Philippines and HOPE have broken ground on a new public school classroom in Manito, Albay, after raising about P1.4 million through in-app donations that turned everyday rides, meal deliveries, and rewards points into funding for education infrastructure.

The funding came from a combination of user-donated GrabRewards points through GrabBayanihan, which allowed customers to channel “GrabCoins” to the project; and a dedicated “Grab HOPE Hour” drive that generated additional donations from GrabCar rides and GrabFood deliveries during a designated 60-minute window.

The classroom will be built inside Inang Maharang Elementary School, which serves more than 100 students in the remote barangays of Manito. The site was selected after Typhoon Uwan damaged public facilities in the area and destroyed two makeshift classrooms at the school, the partners said, leaving students without safe learning spaces and underscoring the need for more permanent, resilient structures.

Grab Philippines Country Head Ronald Roda shares, “Grab is dedicated to moving not just goods and people, but also moving malasakit into action. Together with HOPE, we’re giving our users a simple way to participate in digital bayanihan, turning their everyday rides, deliveries, and rewards into real classrooms. These are new safe spaces where Filipino children can learn, dream, and grow. By making it easier for communities to support these initiatives, we help build a stronger foundation for the country’s next generation.”

The Grab and HOPE classroom is designed as a 7-by-9-meter learning space with four windows, wall-mounted electric fans, complete electrical wiring with outlets and lighting fixtures, and an in-room bathroom with full plumbing. It will also include standard interior fixtures such as a teacher’s desk and a chalkboard.

HOPE Founder and Executive Chairperson Nanette Medved-Po underscored how the partnership is a major part of HOPE’s programs and is giving significant impact on public school education. “We are so excited about the ways we can continue to work with the Grab community to give their contribution and make an impact to public school education in the Philippines. HOPE’s partnership with Grab has been very engaging and exciting for their subscribers: from converting their Grab points to donations, to mounting last October our first-ever GRAB HOPE Hour, when every ride, every order contributed to the classroom we’re building in Bicol. This classroom is the first of many that we hope will not only guarantee safe access to learning but inspire communities around business for good. We look forward to more activities with Grab this coming new year, and more classrooms for our public schools.”

The companies plan to sustain the collaboration through 2026, expanding infrastructure and development initiatives beyond Bicol. To participate, users can navigate to the GrabRewards catalog in-app and allocate points to HOPE.

“This classroom serves as the starting line of our shared vision to bridge the educational infrastructure gap in the Philippines. We are dedicated to scaling this initiative, ensuring that our technology continues to translate into tangible structures for communities across the country,” Mr. Roda adds.

 

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Meta to buy Chinese startup Manus to boost advanced AI 

DESIGN.FACEBOOK.COM

META said on Monday it would acquire Chinese artificial intelligence (AI) startup Manus as the technology giant accelerates efforts to integrate advanced AI across its ‌platforms.

Earlier this year, Manus launched its AI agent, saying it outperformed OpenAI’s DeepResearch.

Meta ‌is closing the deal with Manus at over $2 billion, the Wall Street Journal said, citing people familiar with the matter. Financial terms of the deal were not disclosed.

The companies did not immediately respond ⁠to Reuters requests for ‌comment.

Tech giants such as Meta have been stepping up AI investments through acquisitions and talent hires to stay competitive. Earlier this year, the Facebook-owner invested in Scale AI in a deal valuing the data-labelling firm at $29 billion and bringing its 28-year-old CEO, Alexandr Wang, into Meta’s orbit.

Meta will operate ‌and sell the Manus AI agent following its deal with the Singapore-based startup and will integrate the service across its consumer and business products, including Meta AI, the company said.

Manus is among a wave of Chinese tech firms that have set up ⁠in Singapore to avoid potential disruption from US-China tensions. The firm makes a general-purpose AI agent that acts like a digital employee, completing tasks such as research and automation with minimal prompting.

The ⁠company, part of Beijing Butterfly Effect Technology Ltd Co., promoted the product by completing dozens of tasks for users ⁠on X at no cost. — Reuters

Vietnam’s GSM weighs overseas IPO, eyes $20 billion market value

VinFast Auto Ltd. electric vehicle VF e34 model taxi, center, drives along a road in Hanoi, Vietnam, on Friday, May 10, 2024. — LINH PHAM/BLOOMBERG

Vietnamese electric-vehicle taxi operator Green & Smart Mobility JSC, which is owned by the country’s richest man, is weighing an international initial public offering that could value the company at about $20 billion.

The company said it has been working with advisers to assess a “range of perspectives” on the IPO, but emphasized that no listing is planned for 2026. “We have plans for an IPO, but not in 2026,” GSM, as the company is known, said in an emailed statement, where it confirmed the value target.

“Any eventual valuation would depend significantly on the timing and market conditions,” it said, noting that neither the timeframe nor the exchange for a future listing has been determined. GSM did not provide a figure of how much it expects to raise from the IPO.

An overseas listing would be a setback for Vietnam’s domestic stock market, diverting one of the country’s most promising high-growth listings away from local exchanges. While IPO activity has rebounded this year and the pipeline for first-time share sales into 2026 is growing, flagship offerings remain critical to deepening liquidity, drawing foreign investors, and reinforcing confidence in Vietnam’s markets.

Known domestically as Xanh SM, GSM is 95% owned by Vingroup Chairman Pham Nhat Vuong and has quickly emerged as one of Vietnam’s leading ride-hailing operators. The company has begun expanding its model into Laos, Indonesia, and the Philippines, and is expected to enter India, where the Vuong-founded electric vehicle maker VinFast recently opened an EV manufacturing facility.

The taxi company, which was established in 2023, may expand to other Asian countries and into areas such as intercity transport, premium rides, delivery and corporate services, GSM Global Chief Executive Officer Nguyen Van Thanh said previously.

In Vietnam, GSM had a 40% share in the country’s ride-hailing market in the first quarter of 2025, with Grab at 32%, according to Mordor Intelligence. Rakuten Insight, however, said Grab currently holds 55% of the Vietnam market, with GSM at 35%. — Bloomberg

Last bastion for cheap beef fades in latest affordability threat

Dalma Food AB/CC BY 3.0/WIKIMEDIA COMMONS

Cheap beef may soon become further out of reach. Brazil, one of the world’s few remaining sources of abundant cattle, is heading into a period of shrinking supplies that could push global prices higher.

For the past two years, a surge in Brazil’s beef production helped fuel a jump in exports. That’s as ample herds drove cattle prices lower compared to other regions, and ranchers were encouraged to send more animals to slaughter. At the same time, countries such as the US struggled with high food costs, and sought out sources of cheaper beef.

That cycle is turning, with impacts that will ripple through global markets and hamper US President Donald Trump’s efforts to bring down beef prices.

Climbing prices for calves in Brazil are signaling the start of a new phase, in which ranchers start holding back female cattle to rebuild herds. The practice, known as heifer retention, reduces the number of animals sent to slaughter and marks the beginning of a tightening supply cycle.

“We are coming out of the phase of excess, and the phase of scarcity hasn’t even begun,” said César de Castro Alves, manager of agronomic consultancy at Itau BBA bank. Scarcity, he added, is likely to last a few years.

That’s a major reversal for global beef markets, and bad news for consumers as demand for protein remains high. Trump has made lowering beef prices a priority as affordability has become a major issue among US voters. The president has said he would increase imports, and has eased some tariffs on meat.

American consumers are facing sky-high beef prices as US herds are at the lowest in decades after years of drought and high feed costs. In comparison, Brazil’s ample supplies have given local meatpackers a cost advantage over rivals in the US, Australia and elsewhere. That helped the country ramp up exports not only to the US but also to major buyers such as China.

Now, slaughter rates are expected to slow, reducing available beef supplies.

Improved breeding efficiency may soften the downturn compared with previous tightening cycles, said João Otávio de Assis Figueiredo, a commodity analyst at consultancy Datagro. Still, the firm forecasts that Brazil’s cattle slaughter will fall 5.3% next year, following two straight years of growth.

And the issue is aggravated by a downturn in other beef producing countries as well. Cattle supplies in the US are expected to remain tight for at least another year with heifer retention also yet to begin in earnest, while some retention is expected to occur soon in second-largest exporter Australia as well. That’s affecting prices for all, even as countries have different eating habits and some cuts of meat can be cheaper than others.

“Next year will be crucial because all the major countries in the cattle market will be in a scenario of herd recovery,” said Raphael Galo, head of agribusiness at A7 Capital and an independent consultant for feedlots in Brazil.

Analysts at Rabobank expect Brazil’s total beef output to fall between 5% and 6% next year. Yet Brazil should continue as the largest beef exporter, with the bank estimating a record 4.4 million tons in overseas sales. Brazil may even ship more beef to the US in the first months of 2026, following the exemption of 50% tariffs that were effective between August and November.

Still, those shipments will likely be at higher prices, especially considering global consumers’ unflagging desire for proteins.

“Restricted supplies next year can make the market be really firm, because international demand remains strong,” said Paulo Mustefaga, executive director of the nation’s meatpacking association Abrafrigo. — Bloomberg

Soaring prices spark Australia gold rush for new generation of fortune hunters

A shop worker poses holding three gold nuggets at The Gold Centre store, in Maryborough, Australia, Nov. 28, 2025. — REUTERS/HOLLIE ADAMS

MELBOURNE — In the hinterlands of Australia’s historic goldfields, Vicki Plumridge jumps for joy when she digs a small golden nugget out of the earth.

The retired retail worker was learning how to use her new metal detector when it started bleeping by the moss-covered ruins of a building. After Plumridge dug the nugget out of the shallow dirt with a plastic trowel, a guide estimated it was around 0.2 of a gram of gold, worth about A$40 ($26.58).

“But to me, it’s worth a million dollars,” said the 63-year-old, who had bought the detector only a few days before. “My heart is singing.”

Plumridge’s story is becoming more common, as hobbyists flock to Australia’s 9,600 sq km “golden triangle” in the heart of Victoria state, known as one of the world’s most prospective regions for gold nuggets.

Prospectors have been spurred on by record gold prices, social media, the success of TV show Aussie Gold Hunters, and a love for the outdoors, according to Reuters interviews with a dozen gold hunters.

Plumridge’s detector, Minelab’s Gold Monster 2000, which she bought for A$2,999, sold out across the country within weeks of its October 20 launch, according to Leanne Kamp, joint owner of Lucky Strike Gold, a prospecting shop in Geelong.

“It’s a great price point and we have seen a big jump in sales this year, partly because the gold price has got everyone’s interest,” said Kamp, who has led prospecting tours since 2007.

“We get a lot of internationals. Next week we have some Germans coming. Germans love the gold. The Swiss seem to love the gold too. And we have some coming over from the U.S.,” she said.

The chance of finding nuggets on historic sites improves with each iteration of detectors, which is why there is a rush for new models as soon as they are released, she added.

WORLD’S BIGGEST NUGGETS
Hobbyists have flocked to 19th-century gold rush towns like Ballarat, which laid the foundation for Melbourne’s early wealth and helped make Australia one of the world’s top three gold producers.

The region has yielded the world’s biggest nugget, the Welcome Stranger at 72 kg, found in the 1860s, as well as the Hand of Faith, the largest nugget found with a metal detector at 27.2 kg in 1980. As recently as February 2023, an amateur prospector unearthed a 4.6 kg nugget in the region with a detector, according to the state government.

The lure of large nuggets is one of the draws for Damian Duke, 39, who works in construction. Duke used to go prospecting with his father who died three years ago. Now he takes his own son, Ethan.

The 11-year-old inherited his grandfather’s detector, and Duke has recently upgraded his machine, he told Reuters.

“Where prices are now, you do have the chance of striking a life-changing piece of gold,” he said.

Gold XAU= has chalked up successive records this year, surging above$4,500 a troy ounce on Friday. Goldman Sachs expects prices will reach $4,900 by the end of 2026, with further gains likely if private investors continue diversifying their portfolios amid geopolitical and fiscal uncertainty.

In Victoria, fossickers must buy a permit from the state government. The permit allows them to fossick using only hand tools and to keep any gold they find.

Demand for the miner’s right permits, which cost A$28.60 each and last for a decade, has hit all-time highs, at almost 16,000 by November, from nearly 11,000 last year, according to figures from Victoria’s Department of Energy, Environment and Climate Action, supplied exclusively to Reuters.

In total, there are more than 100,000 active miner’s right permits in Victoria.

A dream of riches may drive people to get out, but they stay out because of the psychological benefits that come from the focus on the hunt, being outside in nature, and connecting with others, prospectors said.

“It’s really good for your mental health, being out here. You take it all in, you can’t think about anything else – I love looking at all the wildflowers,” said Kelly Smith, a 50-year-old from the country town of Koondrook, who was prospecting with her partner on a training session organised by The Gold Centre in Maryborough.

“You’re not guaranteed to find anything. But you’re not going to find anything at all if you don’t look.”

GLOBAL PHENOMENON
Victoria’s latest gold rush is part of a broader phenomenon, said Ben Harvey, executive general manager of Minelab at Adelaide-headquartered Codan, which is the world’s largest maker of hand-held metal detectors.

Alongside Codan’s communications division, strong detector sales in its home market of Australia as well as in Africa and the Americas have helped double the firm’s share price this year.

In Africa, demand may be led by artisanal miners working in cooperatives to improve their standard of living, Harvey said. In Latin America, there is also recreational interest from hobbyists searching for coins and other treasure, he told Reuters in an interview.

Behind the success is a push by Codan’s team of engineers to improve technology to cut down on background noise so detectorists can focus on the gold, he said.

“What a prospector is looking for is, when they go out, they want to find gold, and they want to find more gold than they found last time,” he said. — Reuters

Former Malaysian PM Muhyiddin to resign as chair of opposition bloc

REUTERS

KUALA LUMPUR — Former Malaysian Prime Minister Muhyiddin Yassin said on Tuesday he will resign as chairman of the opposition bloc Perikatan Nasional, effective January 1.

Mr. Yassin has served as the coalition’s leader since its inception after a political crisis in 2020 that saw him appointed as the country’s eighth prime minister.

He served just 17 months as premier, resigning the following year amid criticism over his handling of the COVID-19 crisis.

“I would like to thank all the PN leaders who have given me full support during my time leading PN since its establishment five years ago. I wish all the best to the PN leadership and its member parties,” he said in a statement on Tuesday.

His resignation as opposition chair comes amid tensions this month within the Malay Muslim-dominated PN coalition, with popular Islamist party PAS accusing Mr. Yassin’s Bersatu party of initiating a leadership coup in Perlis state, which is governed by the bloc.

It is unclear who will take over leadership of the PN bloc, as Mr. Yassin was one of its few leaders with broad appeal.

Malaysia is a multi-racial, multi-faith country, with ethnic-Malay Muslims accounting for over 60% of the population while ethnic Indians and Chinese form sizeable minorities.

PN made inroads among Malaysia’s majority ethnic-Malay Muslims in 2022’s general election, and its popularity among more traditional Malays and young voters is seen as a threat to Prime Minister Anwar Ibrahim’s progressive, multi-ethnic alliance. — Reuters

Trump warns Iran of possible strike, urges Hamas to disarm after meeting Netanyahu

Buildings lie in ruins amidst the rubble in Rafah in the southern Gaza Strip, December 8, 2025. — REUTERS

PALM BEACH, Florida — US President Donald Trump said on Monday the United States could support another major strike on Iran were it to resume rebuilding its ballistic missile or nuclear weapons programs and warned Hamas of severe consequences if it does not disarm.

Speaking beside Israeli Prime Minister Benjamin Netanyahu following a meeting at his Mar-a-Lago estate in Florida, Mr. Trump suggested Tehran may be working to restore its weapons programs after a massive US strike in June.

“I’ve been reading that they’re building up weapons and other things, and if they are, they’re not using the sites we obliterated, but possibly different sites,” Mr. Trump told reporters during a press conference.

“We know exactly where they’re going, what they’re doing, and I hope they’re not doing it because we don’t want to waste fuel on a B-2,” he added, referring to the bomber used in the earlier strike. “It’s a 37-hour trip both ways. I don’t want to waste a lot of fuel.”

Mr. Trump, who has broached a potential nuclear deal with Tehran in recent months, said his talks with Mr. Netanyahu focused on advancing the fragile Gaza peace deal he brokered and addressing Israeli concerns over Iran and over Hezbollah in Lebanon.

Iran, which fought a 12-day war with Israel in June, said last week that it had conducted missile exercises for the second time this month.

Mr. Netanyahu said last week that Israel was not seeking a confrontation with Iran, but was aware of the reports, and said he would raise Tehran’s activities with Mr. Trump.

A SECOND PHASE IN GAZA?
Mr. Trump said he wanted to move to the second phase of the ceasefire deal between Israel and the Palestinian militant group Hamas reached in October after two years of fighting in Gaza, a progression that entails international peacekeeping forces deployed in the Palestinian enclave.

Israel and Hamas accuse each other of major breaches of the deal and look no closer to accepting the much more difficult steps envisaged for the next phase. Hamas, which has refused to disarm, has been reasserting its control as Israeli troops remain entrenched in about half the territory.

Israel has indicated that if Hamas is not disarmed peacefully, it will resume military action to make it do so.

During his Monday comments, Mr. Trump heaped the blame on the militant group for not disarming more promptly, arguing that Israel had lived up to its side of the deal and warning that Hamas was inviting grave consequences.

“There will be hell to pay,” Mr. Trump warned when asked what he will do if Hamas does not lay down its arms. He has made similar statements at previous intervals during the fighting.

Mr. Netanyahu said this month that Mr. Trump had invited him for the talks, as Washington pushes to establish transitional governance for the Palestinian enclave amid Israeli reluctance to move forward.

The deployment of the international security force was mandated by a November 17 UN Security Council resolution.

While Washington has brokered three ceasefires involving its longtime ally – between Israel and Hamas, Israel and Iran, and Israel and Lebanon – Mr. Netanyahu is wary of Israel’s foes rebuilding their forces after they were considerably weakened in multiple wars.

Overall, Mr. Trump’s comments suggested he remains firmly in Mr. Netanyahu’s camp, even as some aides have privately questioned the Israeli leader’s commitment to the Gaza ceasefire. His comments also suggested he is willing to risk additional hostilities related to Gaza and Iran, even as Mr. Trump has taken credit for resolving Israel’s wars in both places.

Mr. Trump struck a warm tone as he greeted Mr. Netanyahu before their meeting, going so far as to say that Israeli President Isaac Herzog had told him he planned to pardon Mr. Netanyahu of corruption-related charges – a conversation Mr. Herzog’s office immediately denied took place.

Mr. Netanyahu reciprocated, telling reporters after the meeting that he was gifting Mr. Trump the country’s Israel Prize, which he said has historically been reserved for Israelis.

NEXT STEPS IN GAZA CEASEFIRE PLAN
Mr. Trump’s plan to end the Gaza war ultimately calls for Israel to withdraw from the Palestinian territory and Hamas to give up its weapons and forgo a governing role.

The first phase of the ceasefire included a partial Israeli withdrawal, an increase in aid and the exchange of hostages for Palestinian detainees and prisoners.

An Israeli official in Mr. Netanyahu’s circle said that the prime minister would demand that the first phase of the ceasefire be completed by Hamas returning the remains of the last Israeli hostage left in Gaza, before moving ahead to the next stages. The family of the deceased hostage, Ran Gvili, joined the prime minister’s visiting entourage.

Israel has yet to open the Rafah crossing between Gaza and Egypt, also a condition of Mr. Trump’s plan, saying it will only do so once Gvili’s remains are returned.

Mr. Trump said that he and Mr. Netanyahu did not agree fully on the issue of the Israeli-occupied West Bank but the Republican leader did not lay out what the disagreement was.

TURKEY, SYRIA ALSO DISCUSSED
Before the meeting, Mr. Trump told reporters he would talk to Mr. Netanyahu about the possibility of stationing Turkish peacekeepers in Gaza. That is a fraught subject – while Mr. Trump has frequently praised Turkish President Tayyip Erdogan, Israel and Turkey have a much more circumspect relationship.

While the fighting in Gaza has abated, it has not stopped entirely. Although the ceasefire officially began in October, Israeli strikes have killed more than 400 Palestinians — most of them civilians, according to Gaza health officials — and Palestinian militants have killed three Israeli soldiers.

Mr. Netanyahu said on Monday that Israel was keen to ensure a peaceful border with Syria, and Mr. Trump said he was sure Israel would get along with President Ahmed al-Sharaa, who took power after longtime strongman Bashar al-Assad was deposed last year.

But Israel has been suspicious of the new leader, who was once a member of al-Qaeda, going so far as to bomb government buildings in Damascus this July. — Reuters

US pledges $2 billion in new UN model for delivery of humanitarian assistance

A woman in Turkana County, Kenya stands as her malnourished 4-year-old son eats wild fruits outside their thatch hut, October 29, 2025. — REUTERS

GENEVA/WASHINGTON — The United States on Monday pledged $2 billion in assistance to tens of millions of people facing hunger and disease in more than a dozen countries next year, part of what it said was a new mechanism for the delivery of life-saving assistance following major foreign aid cuts by the Trump administration.

The US slashed its aid spending this year, and leading Western donors such as Germany also pared back assistance as they pivoted to increased defense spending, triggering a severe funding crunch for the United Nations.

The billions of dollars in assistance pledged by Washington on Monday will be overseen by the United Nations Office for the Coordination of Humanitarian Affairs, the State Department said, under what it described as new model of assistance agreed with the UN that aims to make aid funding and delivery more efficient and increase accountability for the spending of funds.

UN data shows total US humanitarian contributions to the UN fell to about $3.38 billion in 2025, equating to about 14.8% of the global sum. This was down sharply from $14.1 billion the prior year, and a peak of $17.2 billion in 2022.

The US and United Nations will sign 17 memorandums of understanding with individual countries identified by the US as priority countries, officials from the State Department and UN said in Geneva.

But some areas that are priorities for the UN, including Yemen, Afghanistan, and Gaza, will not be receiving US funding under the new mechanism, UN aid chief Tom Fletcher said, adding that the UN will seek support from other donors to find funding for those.

Jeremy Lewin, State Department Under Secretary of State for Foreign Assistance, Humanitarian Affairs and Religious Freedom, said further countries would be added as more money is contributed to the mechanism.

“These are some countries where I think our interests overlap … But over time, we will thoughtfully add additional countries,” Mr. Lewin said.

GAZA TO BE HANDLED ON SEPARATE TRACK
A UN spokesperson said Ukraine, Democratic Republic of Congo, Nigeria, and Sudan were among the countries covered in Monday’s package.

But Gaza – where aid agencies have repeatedly said far more aid needs to get into the small, crowded enclave – is not covered in Monday’s announcement and will instead be handled on a separate track, Mr. Lewin said.

He said that the US had approved over $300 million after President Donald Trump’s administration helped broker a Gaza ceasefire “to give pipeline to the UN agencies”, adding that the US will be working to get additional donors for a pooled mechanism under a separate track for Gaza under phase two of the deal.

Mr. Fletcher said that donors would have “specific requirements” around which countries and what type of work should be funded.

“But the humanitarian action at the other end of that must always be neutral and impartial and independent, and nothing in the work that we’re doing together here in this partnership undermines those principles,” he said.

Mr. Lewin said the focus of the funding was on life-saving assistance, while funding for climate-related and other projects that were not a priority for the administration would be cut out.

Earlier in December, the United Nations launched a 2026 aid appeal for $23 billion to reach 87 million people at risk – half the $47 billion sought for 2025, reflecting plunging donor support despite record global needs.

Mr. Fletcher acknowledged it had been a tough year for the UN, following a slew of cuts while humanitarian crises in war-torn countries such as Sudan surged, but said he was optimistic following the US pledge.

“Millions of lives will be saved across 17 countries,” said Mr. Fletcher. — Reuters

BSP sees December inflation between 1.2% and 2.0%

Various clothing items were on sale at a mall in Cubao, Quezon City, Dec. 23. PHOTO BY MIGUEL DE GUZMAN, THE PHILIPINE STAR

By Katherine K. Chan

PHILIPPINE INFLATION likely eased year on year in December as lower electricity prices may have offset costlier food items during the holiday season.

In its month-ahead forecast, the Bangko Sentral ng Pilipinas (BSP) said headline inflation likely fell within the 1.2%-2% range in December, slowing from the 2.9% clip seen a year ago.

At 2% or the upper end of the forecast, inflation may have picked up from 1.5% in November and would be the fastest clip in 10 months or since the 2.1% clip in February. It would likewise mark the first time in 10 months that inflation returned to the central bank’s 2%-4% target.

At the bottom end of the forecast, inflation likely eased to its slowest pace in five months or since the 0.9% in July.

“Upward price pressures may come from increased prices of major food items due to the lingering effects of adverse weather and strong holiday demand, as well as higher LPG (liquefied petroleum gas) and gasoline prices,” the central bank said in a statement on Monday.

This comes despite the Department of Trade and Industry’s imposition of a 60-day price freeze on basic and prime commodities last November, following President Ferdinand R. Marcos, Jr.’s declaration of a state of national calamity.

The Department of Agriculture also implemented a maximum suggested retail price for pork, onions and carrots starting Dec. 1 and is set to last until the end of January.   

However, the central bank said lower prices of electricity, kerosene and diesel during the month may have offset the inflationary pressures from food prices.

In December, the Manila Electric Co. (Meralco) reduced electricity rates by P0.3557 per kilowatt-hour (kWh) to P13.1145 per kWh from P13.4702 per kWh in November.

This is equivalent to a P71 decrease in the monthly electricity bills of households consuming an average of 200 kWh.

Meanwhile, pump price adjustments in December stood at a net increase of P0.80 per liter for gasoline. On the other hand, it posted a net decrease of P3.80 per liter for diesel and P4.40 per liter for kerosene.

The Philippine Statistics Authority is set to release the December inflation data on Jan. 6.

In a separate commentary, Metropolitan Bank & Trust Co. (Metrobank) research officers Maria Kaila Balite and Joaquim Pantanosas said inflation likely settled at 1.4% in December, bringing full-year inflation to an average of 1.6%. 

The bank noted that elevated prices of food such as vegetables, fruits, meat and fish amid increased demand brought inflationary pressures in December.

“Food inflation continues to exert upward pressure to headline inflation this month, with holiday demand providing a push to prices,” it said. “Elevated oil and electricity prices also add to the weight. Metrobank forecasts headline inflation at 1.4% year on year in December.”

Meanwhile, the central bank said it will keep monitoring the country’s inflation and economic growth data in deciding its monetary policy.

“The BSP will continue to monitor domestic and international developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy,” the central bank said.

At its Dec. 11 meeting, the BSP lowered its policy rate by 25 basis points (bps) to an over three-year low of 4.5% as it continues to see subdued inflation and sluggish growth. It has so far delivered a total of 200 bps in cuts since August 2024.

As of November, headline inflation averaged 1.6%, matching the central bank’s full-year forecast.

For 2026, the central bank sees inflation accelerating to 3.2%, before slowing to 3% in 2027.

Mr. Remolona earlier said that the current easing cycle is nearing its end but still left the door open to a final 25-bp reduction next year depending on economic data.

The Monetary Board is scheduled to hold six regular policy meetings in 2026, with the first one set on Feb. 19.

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